Multi-strategy hedge funds benefit in volatile markets

Investors are attracted to the strong returns and relatively low volatility of multi-strategy hedge funds. However, the complexity of the multi-strategy model means manager selection is a challenge.

Multi-strategy hedge funds are enjoying a surge in popularity, driven by their flexibility to allocate across asset classes and strategies, relatively low volatility and consistent return characteristics. The changing shape of the hedge fund client base is also supporting demand for this sector as institutions increasingly look to make direct investments.

However, investors need to be keenly aware of issues regarding operational risk and multi-strategy managers’ ability to generate genuine alpha